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U.S. free trade policy promotes worldwide authoritarianism
Howard Richman, 1/13/2011

An annual report from Freedom House finds that authoritarianism has increased in the world for the fifth straight year. According to Breitbart:

In "Freedom in the World 2011" the Washington-based Freedom House said it had documented the longest continuous period of decline since it began compiling the annual index nearly 40 years ago.

"A total of 25 countries showed significant declines in 2010, more than double the 11 countries exhibiting noteworthy gains," the group said.

"Authoritarian regimes like those in China, Egypt, Iran, Russia, and Venezuela continued to step up repressive measures with little significant resistance from the democratic world," it said.

Significantly, the report mentions China, Russian, and Venezuela as authoritarian regimes that have stepped up their repression of their own people over the last year. These are all countries that have run huge trade surpluses with the United States, stimulating their economies while sedating ours.

The following table shows these countries' trade imports and exports with the United States from October 2009 through September 2010. Although the China and Venezuela data are complete (both goods and services), the Russia data does not include services because I can't find service trade data with Russia on U.S. government websites.

Country Imports from U.S. Exports to U.S.
China $105 billion $358 billion
Russia $6 billion $24 billion
Venezuela $15 billion $34 billion

These authoritarian regimes run huge trade surpluses with the United States partly by suppressing their own people's current consumption and then using the resultant savings to buy foreign financial assets. This economic strategy is called mercantilism. It only works when the authoritarian countries' trading partners tolerate trade imbalances.

If the United States were to insist upon balanced trade, the economic growth of these repressive regimes would slow, and American economic growth would speed up. We could place a WTO-legal scaled tariff upon our imports from trade surplus countries. Such a tariff would take in half of our trade deficit with each country as revenue. The duty rate would go down as trade moves to balance.

Currently America's free trade policy is contributing to the increase in worldwide authoritarianism. If America were to switch to a balanced-trade policy, the new policy could promote worldwide democracy.

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